The East African insurance industry is witnessing a transformative phase marked by a growing appetite for risk management solutions and significant strides in digital and market operations. Despite facing macroeconomic and geopolitical challenges, the region’s insurance sector continues to grow, signaling resilience and adaptability.
In 2022, the total insurance penetration rate for East Africa stood at 1.39%. Kenya led the pack with a penetration rate of 2.14%, followed by Tanzania at 0.62%, Uganda at 0.74%, and Ethiopia at a modest 0.3%. These figures underscore the vast growth potential of the industry as it evolves to meet the diverse needs of an increasingly informed population.
Kenya: Pioneering the Region’s Growth
Kenya remains the flagship market in the region, with gross written premiums reaching $2.5 billion in 2022, reflecting a 4% growth. However, insurance penetration slightly dropped from 2.16% to 2.14%, largely due to inflationary pressures on the Kenyan Shilling against the USD.
The non-life insurance sector, contributing 54% of the industry’s gross written premiums, saw a growth rate of 3.5%. Life insurance, though growing at a modest 4.5%, faces challenges following a significant 16.9% growth in the previous year.
Tanzania: A Market on the Rise
Tanzania’s insurance sector experienced robust growth, with gross written premiums increasing by 14% to $450 million in 2022. The insurance penetration rate edged up to 0.62%, driven by heightened public awareness and innovative distribution channels.
Non-life insurance dominated the market, contributing a staggering 83.2% of gross written premiums. Life insurance, however, stole the spotlight with a 33.9% surge in premiums, thanks to the expansion of bancassurance channels and effective educational campaigns.
Uganda: Sustained Growth and Economic Recovery
Uganda’s insurance market recorded an impressive 21% growth in 2022, attributed to post-COVID-19 economic recovery and increased awareness of insurance benefits. The insurance penetration rate rose slightly from 0.7% to 0.73%.
Life insurance, growing steadily at 36% of total insurance revenue over the last three years, continues to be a significant growth driver alongside the general insurance segment.
Ethiopia: An Untapped Giant
Ethiopia’s insurance market remains nascent, with gross written premiums of $315 million in 2022, representing just 0.3% of the country’s GDP. The non-life insurance sector overwhelmingly dominates, accounting for 93% of premiums.
Despite challenges like currency depreciation and the lingering effects of the COVID-19 pandemic, the local industry shows potential for growth, bolstered by domestic premium increases.
Conclusion
The East African insurance industry is on a growth trajectory, fueled by increasing awareness, technological advancements, and innovative distribution models. While challenges remain, the region’s diverse markets present opportunities for stakeholders willing to adapt and innovate.
